Gold holds the gains from the recent rally above 1,400 but is trading below the recent high. USD weakness and an escalation in USA – Iran tensions around the Hormuz Straits boosts gold prices. Short covering early this week helped gold to reach 1,439 a level that we haven’t seen since 2013. FED dovish minutes opened the door for more cuts before the end of the year and sparked a rally in dollar denominated assets.
The momentum is bullish for the gold as it holds above all the major daily and weekly moving averages. The precious metal is trading in 10 dollar range with traders jump in and out of the market trying to catch the next wave. The immediate support for the yellow metal stands at $1,401 the daily low while more solid support can be found at the $1,357 the low from June 20. On the upside resistance would be met at 1412 the today’s high and then at 1,420 round figure. Traders must be cautious on gold at current level as the volatility is very high. New long positions only if the precious metal closes convincingly above 1,411.